IBM third quarter 2024 earnings report | Wilnesh News

International Business Machines Corporation Shares of the hardware, software and consulting provider fell 3% in after-hours trading on Wednesday after third-quarter revenue fell short of Wall Street expectations.

Here’s how the company compares to the LSEG consensus:

• Earnings per share: Adjusted $2.30, expected $2.23
• income: US$14.97 billion, expected US$15.07 billion

IBM’s overall revenue increased 1.5% year-on-year statement. The company had a net loss of $330 million, or 36 cents per share, compared with a net profit of $1.7 billion, or $1.84 per share, a year earlier. IBM slides into the red on one-time pension settlement charge an agreement and Prudential.

For the fourth quarter, management expects constant currency revenue growth to be consistent with the third quarter. On a constant currency basis, third-quarter revenue grew 2%. IBM reiterated its goal of free cash flow of more than $12 billion in 2024, and achieved free cash flow of $6.59 billion in the first nine months of this year.

In the third quarter, IBM’s software revenue was $6.52 billion. That figure grew about 10% and was higher than the $6.37 billion consensus among analysts surveyed by StreetAccount. Revenue from Red Hat, which was acquired in 2019, grew 14% compared with 7% in the second quarter. Software’s gross profit margin is 83%, higher than any other segment.

Consulting revenue was $5.15 billion, down 0.5% and slightly below StreetAccount’s forecast of $5.19 billion. Business transformation revenue grew 2%, compared with 6% growth in the second quarter. IBM Chief Financial Officer Jim Kavanaugh told CNBC’s Seema Mody that the consulting unit, like its competitors, still faces a very uncertain economic environment.

Revenue from the company’s infrastructure segment was $3.04 billion, down 7% and below StreetAccount’s forecast of $3.24 billion. Kavanaugh told Mody that customers are expecting new mainframe computers in the first half of 2025.

IBM’s generative artificial intelligence business now exceeds US$3 billion and grew to more than US$1 billion in the second quarter, the statement said.

IBM said this quarter it will expand its network of Oracle Product Consulting and Acquisition of Oracle Services Company ase alpha. The company also completed the sale of its QRadar cloud software assets to Palo Alto Networks and acquisitions StreamSet and webMethods From Software AG.

Excluding after-hours action, IBM shares are up about 43% so far this year, while the S&P 500 has gained about 21% over the same period.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

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